Secondary market research sources

Secondary market research uses information that already exists, because someone else collected it for their own purpose — for example published government statistics, an article in a trade magazine or a report bought from a market research company. Because the data is already out there, it brings several advantages over gathering information first-hand.

Quicker and cheaper

The main advantage is speed and cost: nobody has to design a questionnaire, find willing people or wait weeks for replies, so the information can often be found in a single afternoon. Much of it is free, and even a paid report can work out cheaper than commissioning your own survey. A dog-grooming business that wants to know how much UK households spend on pets can use figures already published in an industry report instead of paying to ask people itself.

A wider view

Secondary research can give a wider range of information on a larger scale than one small enterprise could ever collect alone. A single business cannot survey the whole country, but national statistics and whole-industry figures already cover it. Much of it is industry-specific too: a trade magazine for bakers reports baking trends and equipment news, so it is directly relevant to one bakery in a way that general business news would not be.

Already analysed

Secondary data may already have been analysed by whoever collected it and presented as tables, percentages or averages. When the data is quantitative, this makes it easier to compare figures and spot trends — for example, average spending on takeaway food rising each year — instead of working through raw numbers yourself.

Secondary market research is information that already exists because another person or organisation collected it. It can save an enterprise from gathering data first-hand, but it has drawbacks.

Out of date or inaccurate

The information may have been published a while ago, and customer habits, prices and technology change. An old report could point a business towards a product or price that no longer works. It may also be inaccurate if the original organisation made mistakes or left gaps in the data.

Gathered for another purpose

The data was collected to answer someone else's question. National figures for all leisure spending, for example, do not tell a local climbing centre what teenagers in its town would pay for a session. Even when the data covers the right industry, it may cover a much wider market, so it is not specific enough to answer the exact question the enterprise set out to research. A business wanting to know whether people in one town would buy a new product may find only country-wide averages.

Bias and cost

Bias means the information is one-sided because the collector has a reason to present it that way. A trade magazine funded by equipment manufacturers might highlight success and play down complaints. Cost is another drawback: although some secondary data is free, specialist research companies charge for their reports, and a detailed one can cost hundreds of pounds — a real problem for a small start-up.

Internal data is secondary market research that comes from inside the enterprise — information the business has already gathered itself. It includes its own customer data (order records, account details), sales data (what sold, when and for how much), marketing information (how past promotions performed) and financial information (costs, revenue and profit). Secondary research can be internal, from inside the enterprise, or external, from outside it, such as government statistics.

Data is secondary research only when it was gathered earlier for a different reason and is now being reused for the current research aim. A cinema called The Screenhouse wants to decide when to run its family film club, so it checks its ticket-booking records from last year and finds that Saturday morning bookings were almost twice as high as Wednesday afternoon bookings. Those bookings were recorded to sell tickets, not to plan the club, so reusing them now is secondary research — even though the cinema gathered the data itself.

Why internal data is valuable

• It is quick and free to access: the records already sit in the business's own systems, so nobody has to be paid, surveyed or waited for.
• It is highly relevant, because it describes this enterprise's own customers, prices and products rather than a whole market.
• Trends can be identified over time to help decision making and forecasting. If a leisure centre's attendance records show swimming lessons are busiest every January, it can schedule more instructors before the new year instead of guessing.

Drawbacks of internal data

• It may be out of date or erroneous, such as a file from three years ago or a mistyped price, which gives a false picture to plan from.
• It may not help when launching a new product into a new market, because the business holds no records of those customers yet.
• It may limit ideas and outlook, since it only shows what the business already knows and cannot reveal what a rival is planning.

Books, newspapers and trade magazines are secondary sources: the information already exists and was gathered by someone else. Books usually give general background information, newspapers report news, and trade magazines report news and developments in one industry, written for the people who work in it. Many are now available online as well as in print, so you can read them in a library, buy them, or find them on a publication's website.

What each source is useful for

Advantages

These sources are usually easy and inexpensive to access. You can read them in a library, on a news website or in a reasonably priced magazine, so gathering information rarely needs a big budget. They can also show current trends and styles, especially newspapers and trade magazines, because they are published regularly. For example, a trade magazine may show that customers are asking for eco-friendly packaging, which helps an enterprise decide what to offer next.

Disadvantages

The information may be incorrect or biased, depending on the author or publication. A newspaper might favour one side of a local argument, and a trade magazine may be influenced by the companies that advertise in it. The information may also not suit the enterprise's exact needs: a general book on shop design may not answer whether a particular town needs a new board-game café.

Competitors' data is secondary data taken from other enterprises — businesses selling in the same market. It already exists and was collected by someone else, so it counts as secondary market research.

It appears in four main forms:

• Financial data — published company reports with turnover and profit figures, which show how much a rival sells and how profitable it is.
• Marketing data — the prices a rival charges, the promotions it runs and the products it launches.
• Customer information from online sales and transactions — the sales volumes and best-selling ranges a rival reports.
• Loyalty or incentive scheme data — the limited buying patterns a rival makes public from its points card or reward card, such as a top-ten list of popular items.

Advantages

A key advantage is that the information is free and publicly available. A rival's reports, adverts and price lists can be read without paying anyone or filling in a questionnaire.

It is also highly relevant, because a direct competitor sells to similar customers in the same market. If a rival's sales of reusable water bottles are rising, that tells you something real about the customers you want to attract.

Disadvantages

Rivals keep commercially sensitive details private: they will not release information that could help another business compete against them. The most valuable data — exactly how they set prices, who their suppliers are, the full detail behind their reward-card sales — stays hidden. You see the advert, not the sales figures behind it.

Data for a large company cannot easily be compared with a small one's, because they operate on a different scale. A national chain spending £2 million on advertising tells a market stall holder very little about what a sensible advertising budget looks like for them.

Government publications and statistics are reports and data gathered by government agencies and made available to the public. They can include census data, which counts people and households and provides population and household information.

Advantages

• Reliable and unbiased: the figures come from official counting rather than from a company trying to sell you something, so they are a trustworthy starting point.
• Usually free and quick to access: much of the information can be found on government websites or downloaded without paying.
• Detailed data: you can usually specify the data items you want, such as households in one local authority area, and the format, such as a spreadsheet or a table.

Disadvantages

• Can be out of date: data takes time to collect and publish, and a census is only carried out at intervals, so the figures may describe an earlier year.
• Charges may apply: some specific datasets cost money, so government statistics are not always free.
• Not directly about the business: the data describes the whole population, not one enterprise's customers, so it may not answer a question about that business's own buyers.

For example, a mobile dog-grooming service deciding which housing estates to visit could look at government figures for how many households are in each area and how many have no car. That helps the owner judge where people may struggle to travel to a groomer, but the figures cannot say how many households own a dog or what they would pay for a groom. They are useful background, not a report on the business's own customers.

Market reports are reports and statistics put together by specialist market research companies, such as Mintel, or found in commercial publications. You buy them rather than collect the data yourself, so they are a secondary research source.

Why they are useful

Research companies employ analysts who survey thousands of customers and study a whole industry before writing a report. That gives you precise and comprehensive data — market size, growth over recent years, competitor shares and customer segments, all in one place. You could not collect figures on that scale yourself with a small budget.

Providers also regularly update their reports, often bringing out a new edition each year. A report bought today reflects recent spending habits rather than sales patterns from a decade ago, so the information is current and safer to base decisions on.

Why they can let you down

The biggest drawback is cost. Reports are sold for high fees, sometimes hundreds or thousands of pounds for a single title. For a start-up with a few thousand pounds of savings, one report could swallow most of the marketing budget before anything is spent on advertising.

Reports are also broad, because they are written to suit a wide range of enterprises rather than one business. Imagine a report on the UK pet care market: it covers food, insurance and grooming together. A mobile groomer wanting to know how much households in one town would pay for a monthly grooming subscription will not find that answer, because the report was never written with her question in mind. The data may be detailed and up to date, but it may not settle the exact decision you are facing.